Slotting Allowances and Resale Price Maintenance: A Comparison of Facilitating Practices
AbstractProducers in a perfectly competitive industry compete to obtain shelf space at the retail level. Barring contract observability problems, slotting allowances are observed in equilibrium. Producers charge a high wholesale price, but they give back their profits via up-front payments to retailers. However, if the individual supplier-retailer wholesale price terms are unobservable by competitors, then resale price maintenance will be seen, but the coverage will not be universal. The equilibria can be ranked by the usual social welfare criteria. Resale price maintenance, though worse than simple marginal cost wholesale pricing, yields greater surplus than the slotting allowance equilibrium.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 22 (1991)
Issue (Month): 1 (Spring)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- John Asker & Heski Bar-Isaac, 2011.
"Exclusionary Minimum Resale Price Maintenance,"
11-22, New York University, Leonard N. Stern School of Business, Department of Economics.
- Horst Raff & Nicolas Schmitt, 2011.
"Manufacturers and Retailers in the Global Economy,"
CESifo Working Paper Series
3508, CESifo Group Munich.
- Etro, Federico, 2011.
"Endogenous market structures and contract theory: Delegation, principal-agent contracts, screening, franchising and tying,"
European Economic Review,
Elsevier, vol. 55(4), pages 463-479, May.
- Etro Federico, 2010. "Endogenous Market Structures and Contract Theory. Delegation, principal-agent contracts, screening, franchising and tying," Working Papers 2010_25, Department of Economics, University of Venice "Ca' Foscari".
- John Asker & Heski Bar-Isaac, 2012. "Vertical Practices Facilitating Exclusion," Working Papers 12-20, New York University, Leonard N. Stern School of Business, Department of Economics.
- Miklos-Thal, Jeanine & Rey, Patrick & Vergé, Thibaud, 2008.
"Buyer Power and Intraband Coordination,"
IDEI Working Papers
500, Institut d'Économie Industrielle (IDEI), Toulouse.
- Rao, Akshay R. & Mahi, Humaira, 2000. "Slotting Allowances: Empirical Evidence On Their Role In New Product Launches," Working Papers 14348, University of Minnesota, The Food Industry Center.
- Schutz, Nicolas, 2013. "Competition with Exclusive Contracts in Vertically Related Markets: An Equilibrium Non-Existence Result," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 439, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Federico Etro, 2010. "Endogenous Market Structures and Contract Theory," Working Papers 181, University of Milano-Bicocca, Department of Economics, revised Mar 2010.
- Cooper, James C. & Froeb, Luke M. & O'Brien, Dan & Vita, Michael G., 2005. "Vertical antitrust policy as a problem of inference," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 639-664, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.